One Income Decision
My Story: Route to One Income
Adjusting to One Income
Going from Two Incomes to One
One Income Decision Ahead
For years, I have been the main income earner in our family. Now, it finally looks like my husband has a stable, decent income. I view this as an opportunity to develop and enjoy my frugal skills, so I can spend more time with our young children. I don't need to be convinced of the benefits. I am concerned, however, that I may be ignoring some of the disadvantages. Aside from losing the security of two sources of income, what other things should my husband and I consider before I leave my job to manage our home and raise our children?
You'll Need to Keep Up
I, too, did the same thing. If Karen has a "career", she needs to keep up with the latest at home so that she can re-enter the job market if/when necessary. If her career is just a job, she could use this valuable time to study or gain necessary skills for a "career" of her choice. I quit a high paying job 13 years ago to stay at home with my children and never regretted it. I had previously had a job at a newspaper as social page editor. My family was delighted and we became very close again and....I took writing courses of all kinds at home and ended up a free-lance writer which I loved better than the editing job. Now I can write about things that are important to me rather than just social chats. I regretted it at first for about one year until my children grew up and told me how much it had meant to them. So there, give this info to Karen. Her kids should be her first priority. You can't go back on the years and you can learn new skills while you are at home.
Mary Z. W. of Amarillo, Texas
A couple of items to check out:
Does your husband's job have health insurance, disability and life insurance benefits comparable to what you might be giving up? Check into the impact of not working on your Social Security benefits at retirement. I think you'll find that the formula pays most to those who have longest employment. In the same vein, is your employer contributing to any retirement programs in your behalf? Project it out and see what the impact at retirement might be.
Get a Financial Plan First
One, before doing anything, get a financial plan. Simply saying that your husband's income will replace yours takes a short term view. Begin by putting together a savings plan for college funds, retirement (never mind a better car or bigger house someday) or a higher standard of living. This will enable you to focus on the future, set priorities and goals, and set in motion a way to measure your progress. Abandoning that second income may come back to haunt you some day. Think long term. Also, examine how the benefit plans of both jobs compare. Might you be adding unforeseen expenses under his insurance? Is your benefits program better?
Before deciding to quit your current job consider this. Your current abilities in your job are an asset to your employer and he is the one most likely to give you the highest wages and best working arrangements. Consider approaching him with the idea of going from full time to part time or with job sharing or working from home.
This will benefit your employer because he will not need to hire and train a replacement for you. This costs your employer money. You already have the knowledge of how best to do your job and do it the right way for your employer. They also may save extra money by being able to drop you from the employee benefits program. However, you may not want to give up these benefits. Negotiate!
This will benefit you because your will have time with the children before and after school, be able to contribute financially to the family, maintain your job skills for the future, as well as maintain a sense of independence. This brings up the question of what to do during the summer or school days off or what if one child is not in school yet? Negotiate this with your employer. Can you work from home? Can you take the summer off? Can your employer supplement your work with a temporary during those times? Be creative...
And besides, consider the likelihood that many of the parents of your children's friends are both working. That may mean that there aren't any other children in the neighborhood after school or that they are at camp during the summer. Having your children at home with nowhere to go and nobody to play with isn't fun for them or you. Take everything into consideration. If you aren't sure of what everyone else does, ask one the single parents in your area. They already know what resources are available (after school programs, camps, etc.) and how to take advantage of them.
Again, Plan! Plan! Plan! Think things out on a long term basis. Ask yourself why you want to quit your job and stay home. Be sure the reason why isn't just because you want to quit your job and stay at home! Sometimes you may just feel (as you intimated in your letter) that you just don't want to be the breadwinner any more...
For the Last 9 Years...
I've been a stay-at-home mom for the past 9 years. I worked for 12 years prior to that. But after the birth of my last daughter I knew I wanted to be with her. Problems? Sure, but I also added up what it would cost me to return to work. Clothing? at home you can pretty much do dress down Friday everyday. Lunch? at work I was always eating out. I'd try to bring my lunch, but always ended up grabbing a burger. Not so at home. Gas? Mileage? saved a lot. Day care? When I added all these up, I wasn't really bringing anything home. I just put us in a higher tax bracket. And the new baby gave us the tax advantage we needed. There's a big tip adjust your husbands W-4 at work. Chances are your paying the government every payday money you could be using at home. You mentioned finding frugal ways, well you'll have a lot more time to use your knowledge, it's hard to compare shop, or shop at the thrift stores when your working full time. Believe me I found hundreds of ways to save money and be twice as happy.
Heidi in Vancouver.
My husband and I have always lived on one income, so in many respects I don't know any different. One disadvantage I can see is if you still spend like a 2 income family, you will be in a world of hurt quickly. Also, you must learn to delay gratification. It will take longer to make those major purchases. The only other issue is that if your children are in public school, peer pressure can be hard! If you still want your children to have 'trendy' clothes, scout out resale shops and garage sales in affluent areas. Good luck! It is worth it!
We've Done It
I too, found myself in this position several years ago. My husband supported me while I went to college, when I got out we quickly realized that I was capable of supporting us, which allowed my husband to return to school. He now has a career that provides a stable income. My children are almost all teens now, and I chose to continue to work part time, mostly because my insurance benefits far outweigh what his company has. I found that the extra time at home with my family has been a big plus, but I enjoy my work, being a nurse is part of my identity, and I don't think I would be as satisfied if I gave it up completely. I know when my kids are ready for college I can work more hours for the extra cash flow that they will require, but for now I am thrilled to be able to stay at home more, to send them off to school, and help more with homework. I think I have been able to have my cake and eat it too!
Try Part-Time Work
My advice to a spouse that has decided to leave a job and stay home would be to consider staying in a part-time or volunteer position that would enable you to use your job skills and keep them current. Even an occasional or temporary job would be helpful.
When I stayed home for 13 years and reentered the job market, I studied computers and got an associate degree to prepare. It was still quite a culture shock reentering. If I had it to do over, I would have found occasion temporary work during those 13 years, or I would have volunteered in an office. You have to remember, your situation can change from year to year (death, divorce, downsizing, etc.) so I would advise against becoming too dependent on one income.
Work at Home
I gave up a good job with a company that put me through graduate school. The year after I got my M.B.A. I gave birth to twins and decided to be a full time mom. My husband had just got his Ph.D. and he was offered a job in another state.
What I have done to help out our finances (which changes dramatically after going from DINKs to one income with two kids) was put my business school skills to work at home. I think of myself as our home's manager. I search for cost savings everywhere. I clip coupons and match them to sales. I group my errands together and map out the most efficient paths to minimize gas and mileage. For entertainment I search newspapers and research organizations for free or near free family activities (my twins are now 4 1/2 years old).
Here are some examples of what I have done differently. Once a week I go to the library. Here we borrow videos for both us the kids, I check out magazines instead of subscribing (this saved us almost $200 a year since we love to read), and we can now check out computer software (several good children's programs), I found a dollar movie theater in a near by town that shows the second run movies, I switched to MCI for long distance and make my calls on Sundays when it is only $.05 per minute (plus they have a program where you can earn free movie rentals at Blockbusters so we save those for special occasions).
Basically, I do a cost/benefit analysis on our purchases and research the best deals. I manage the money at home the way a company would expect me to if I worked for them. I enjoy it and I love being home with my children. The benefits of our time together is much greater than the cost of giving up that second income!
What We've Done
My husband and I just went through a similar situation. Things to consider: outstanding debt, standard of living, cost of living. We planned ahead about a year before I quit. All of my income went to pay off existing debt, therefore, we have not been living off of my income for the past 12 months. When the debts are gone, the income is no longer needed. The debt we have left is easily manageable with his income. Better safe than sorry - So I'm working 1 day a week just as a safety net as we make the adjustment. Lots of expenses reduce when you stay home: day care, taxes, transportation, clothing, and groceries (if you're like us and eat out after a hard day's work!) If you truly want to quit, you'll find corners to cut in your own budget!!
Just Do It!
Consider nothing! Just do it. You can always second guess your decision, but being home with your kids is priceless. I gave up a career, years ago, to stay home with my kids. I chose being a mother-at-home, as a career. Sure, sometimes I think about how much richer I could have been, how successful I could have been, and on bad days, wonder, if it's worth it. But it is. I get so tired of teaching social skills, table manners, and plain common sense to kids, whose parents, don't have the time. And, remember, teenage children need you home, for them, just as much as young children. When I think of all the times I've been home for rides, sickness, to talk to, I know I've made the right decision. I've never missed an event or game their whole lives. I'd rather live poor, then to have lived missing out on them!
We have just become a one income family. I am enjoying it very much and that is because I took into account one of the disadvantages and that is the need for a social outlet which is non kid related. This can sometimes be expensive if you are thinking country club tennis. What I have done is to start up a small break even home business and also take some cheap/free classes. I have also stayed subscribed to several work based email lists even though I intend to be out of the 9-5 workforce for at least 4 years it still gives me something to talk about when I run into old work mates. Who knows I may not have to go 9-5 if my home business takes off but it still pays to keep those old ties together.
I also planned not to get into the soap opera rut. Housework is a thankless task and you may find that you miss the positive side of paid employment - your two year old isn't going to give positive feedback to you about the shine on your floors. I use the Sidetracked Home Executive system of house management to keep me motivated.
All my jobs are on 3x5 cards in a file. They keep me on track and I am motivated by being able to file each one after I have completed the task. A small reward compared to what I was used to in my paid job but better than nothing.
Trial Basis First
I am a stay-at-home mom and would like to make a suggestion before you quit your job to stay home full time. Before you quit, put your paycheck in a savings account and see if you can successfully live on your husband's income alone. This will give you a "true" test to see if you can make it financially. Also, make sure you have at least 2 or 3 months of income in the savings account as well.
I have also wished that we had allowed in our budget for some child care during the day; not just for my doctor appointments and things like that but also for some "mommy" time (as we call it) since I cannot leave my job stresses at the office. As a stay at home mom you can lose your identity sometimes so make sure you and your husband have date nights. Hope this helps! Good Luck!
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When I moved from the workforce to a full-time homemaker, my biggest problem was adjusting to the reduced status many people conferred to homemaking. It took me a long time -- over a year -- to feel good about the choice I had made. It was especially hard because I was very well educated and my family expected "great things" of me, so I felt that I was letting them down and squandering my education. I don't think that way anymore. Mothering my children is BY FAR the hardest, most challenging thing I ever done in my life. Anyone who doesn't value investing time and energy in future generations has their head on backwards.
One thing that helped me come to this point was subscribing to "Welcome Home," a support journal written by and for stay-at-home moms. They address the unique joys and struggles of our chosen profession in an intelligent and respectful way.
Another disadvantage I have found is in your money attitudes about power and ownership. Even though you may pool your funds in the marriage, it can still feel strange to purchase birthday/Christmas gifts for your husband with "his" money. Or it might become hard for you to justify maintaining your private needs with "his" money; Did I really need that new bra? Do I really need a babysitter to give me a break from the kids once a day every week? If I am overwhelmed with drudge work, is it okay to hire help? I have only recently come to a place where I consider our marriage a true partnership... he contributes work, I contribute work. Just because he gets paid for his work and I don't, doesn't mean mine is any less valuable to the marriage.
I had to develop a very strong sense of self-worth to get this far. My convictions are still challenged every time someone asks me "So.... What do you DO?" and then dismisses me when they hear my answer. For a while I had fun telling people I directed and ran a 24-hour, on-call day care center. Boy, you should have seen people's eyes pop out! But really, that IS what I do.
Even the tax code favors working mothers... although I consider regular breaks from child care essential to my sanity, I can't deduct the expense... whereas if I was what the IRS so backwardly calls "gainfully employed" during that time, our taxes would be reduced by the amount I spent on child care. Fortunately, our lawmakers are slowly waking up to this fact and helping to even out the playing field. Last year homemakers won the right to fund our BRAs with the same deductible as working spouses. Previously, nonworking spouses were limited to a $200 deduction for IRA contributions. Now, it's $2000, same as everyone else.
Count the Costs
Be sure that when you calculate the cost of losing one income, you include all the costs, not just the income itself. When you give up your job, you may also be giving up health, dental, life and disability insurance, a company-matched 401(k)plan and/or pension, a company-sponsored health club or day-care facility, etc. Unless your husband's company matches your benefits, you may have to pay to replace some of these things yourself. Also consider that when you decide to re-enter the workforce when the kids are older, you may need to re-train, and depending upon your career re-training can be expensive.
Take the Next Step
- Do you struggle to get ahead financially? Then you'll want to subscribe to our free weekly Surviving Tough Times newsletter. Each issue features great ways to help you stretch your dollars and make the most of your resources.
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